RB nr 28/2008

Legal basis: Art. 56 subpar. 1 pt. 1

The Management Board of MCI Management SA informs that on April 24, 2008 MCI.TechVentures 1.0. subfund (Fund), which belongs to MCI Group, signed an investment agreement with the shareholders of a Czech company INVIA.CZ s.r.o. On the basis of that agreement after meeting the preliminary conditions provided in the agreement the Fund shall buy 50.10% shares in that company from previous shareholders. INVIA.CZ is the leader of the e-tourism market in the Czech Republic and in Slovakia. In respect of turnover there is no other such company in the whole region of Central and Eastern Europe.
The parties to the investment agreement decided not to disclose the value of the transaction, however, according to the internal terminology of the Fund it was so called “big ticket” transaction that is a transaction whose value exceeds PLN 10 million. It was then one of the major investments of MCI in its portfolio. After finalization of the transaction apart from the Fund the shareholders of the company shall include 3 natural persons from the Czech Republic who were the founders of INVII in 2002 and Internet Travel Holding AG, a subsidiary of Swiss investment group – Centralway AG which has been so far a majority investor. The parties to the investment agreement accepted a joint objective to go public through introduction of the company to the Warsaw Stock Exchange in 2009. The previous owners of INVII are planning to sell through IPO another block their shares remaining the owner of more or less a fourth of the company.
INVIA.CZ was established in 2002 as the fourth player on the e-travel market in the Czech Republic, however, soon as a result efficient management and great emphasis on effectiveness of internet marketing it became number 1 in its original market and subsequently began its international expansion. At present INVIA.CZ, which generated turnover at the level of almost EUR 50 million in 2007, is bigger than the other 3 major players in the Czech Republic put together. Since 2005 the company has been generating profits. In 2004, INVIA.CZ entered into the Slovak market where it also is the leader now, however, the range of its operations in Slovakia is significantly smaller than in the Czech Republic, which is connected with a much earlier stage of development of this market and with its smaller scale. The company also launched its sales websites in Poland and Hungary, and it is soon planning to start its operations in Romania. INVIA.CZ’s ambition is to become the leader in the markets where it operates especially in the markets which are late compared with the main markets of the region that is Czech Republic and Poland (the size of the online tourism market in the Czech Republic is comparable to the Polish market despite almost 4-times smaller population.)
By making this transaction MCI is planning to become an active center of consolidation of the e-tourism sector in Central and Eastern Europe. MCI’s objective within 2-3 years is to build a strong group with revenues in excess of EUR 250 million. With two biggest companies in this area in the region, Travelplanet and INVIA, in its portfolio MCI is most likely to succeed in that pursuit. Both companies will operate independently, however, the Fund as the leading shareholder will be interested in making the most of possible operating and strategic synergies. In the longer perspective MCI does not rule out the capital consolidation of both entities based on market conditions.
INVIA.CZ has in its offer over 40,000 trips from over 420 tour operators and for some of them it is the biggest sales channel. Apart from tourist packages the company also offers flight tickets, hotel accommodation, insurance or car rental, however, these products represent less than 5% of its turnover from sales. INVIA.CZ takes special care of building a community around its offer by developing a number of functionalities of Web 2.0 including a possibility of posting reports or photos from trips on the website, providing discussion fora, possibility of rating hotels, etc. The company also developed a loyalty system for over 300,000 registered users. It is worth noting that INVIA.CZ is one of the most recognizable brands on the Internet in Czech Republic and on average 10% of Czech Internet users regularly visit the website. In 2005, the company decided to extend its operations to include an off-line channel and it created its own three points of sale. Additionally since 2007 is has been building a franchising model with about 30 points of sale operating under the brand name of INVIA.CZ in the whole Czech Republic.
The tourism market in Central and Eastern Europe is very attractive and has a high potential for growth. The number of people living in the 5 countries where INVIA.CZ operates is comparable to the number of people living in Germany, whereas the value of the tourism market there is about 8 times lower than at our neighbor’s in the West. The differences regarding the sales of tourist offer over the Internet are even greater. The number of people living in the “12” countries which joined the European Union correspond to over 20% of the total number of people living in the Community, whereas they generate barely 4% of the revenues from tourism sector on-line. It is worth seeing all this with the prospect of growth of the tourism market alone which in the traditional channel grows annually on average by over 2.5% (during the years 1998-2009), whereas at the same time the revenues of the tourism sector over the Internet grow on average by over 70% annually.